How Paytm sealed Berkshire deal

VIJAY SHEKHAR SHARMA, COFOUNDER AND CEO OF PAYTM

In the first week of February Paytm’s co-founder and chief executive Vijay Shekhar Sharma met his board member and Goldman Sachs chairman Mark Schwartz in Canada. Schwartz had a proposal for Sharma. He wanted to introduce Sharma to the world’s most respectable and renowned investor, Berkshire Hathaway.

Sharma jumped on the opportunity and a few email exchanges later Sharma, Schwartz and SAIF Partners’ managing partner Ravi Adusumalli (Sharma refers to him as a co-founder), were on a flight to Omaha to meet Todd Comb, an investment manager at Berkshire Hathaway. Sharma met Comb at Berkshire’s office. “One meeting and two phone calls later, the deal was done,” said Sharma, in a telephonic interview on Tuesday. Edited excerpts:

What interested Berkshire in Paytm?

I would say it was the scale and execution of the company.

What does Berkshire bring to the table other than the brand name?

They have global financial services experience. Todd is a banking, fin-tech and payments expert, and his experience will help us understand how the rest of the world is doing the digital payments business. With Berkshire, we have a new vantage point of our capital table and business model. I can also say comfortably that this investment will put to rest all doubts about our ability to make money. It gives us credibility that such a business can make money.

Do you have plans to take this business global?

Right now the focus is India, as the India opportunity is huge. Berkshire’s global experience will help us refine our business model and will help in our ability to be profitable.

Is Berkshire looking at other Indian company’s for investments?

Not that I am aware of. Our conversation with Todd has been around Paytm and the Indian payments ecosystem.

We hear this is a small cheque. Will Berkshire pump in more money?

We could not pick all the money that was offered. Berkshire wanted to invest more than what we have accepted. We did not think it was the right time to raise more money and dilute further, as we already have sufficient capital in the bank.

What is Berkshire’s expectation from Paytm?

To build the dominant and biggest financial services company in India.